TYPES OF BONDS

The County may issue either tax-exempt or taxable bonds.  Taxable bonds would generally be issued only in combination with tax-exempt bonds.  Taxable bonds do not require an allocation of bond authority from the California Debt Limit Allocation Committee (CDLAC).

Tax-Exempt Private Activity Bonds

Private activity bonds
Private activity bonds require an allocation of bond authority from CDLAC.  To obtain the allocation, the County must submit an application to CDLAC on behalf of the developer. Submittal of the application is at the discretion of the County, not the developer. The developer must pay all required CDLAC fees in advance of application submittal.

The Community Development Commission helps to strengthen neighborhoods, empower families, support local economics, and promote individual achievement. 

501(c)(3) private activity bonds
The County may issue 501(c)(3) bonds on behalf of qualified not-for-profit organizations. 501(c)(3) bonds are tax-exempt, but do not require an allocation from CDLAC.  501(c)(3) bonds cannot be used in conjunction with the Low Income Housing Tax Credit Program (LIHTC).

Taxable Bonds

The interest on taxable bonds is not exempt from either federal or state taxation.  These bonds are not subject to federal volume "cap" limitations and therefore do not require an allocation from CDLAC.  Taxable bonds can be used in combination with Low Income Housing Tax Credits.  Taxable bond issues must meet all applicable requirements of these Policies and Procedures (including rating requirements) and any such additional regulations which may, from time to time, be promulgated by the County.

Bond Rating and Credit Enhancement Requirements

The County requires that bonds for which it acts as issuer be both credit enhanced and have a minimum rating in the “A” category by Standard and Poor’s (equivalent Moody’s or other bona fide agency rating also acceptable), except as noted below, OR that the bonds be privately placed with a “sophisticated investor” as defined by the County.  The County reserves the right to impose these minimum requirements on bond issues for which the County issues bonds or the County holds a TEFRA hearing.

Credit enhancement may take any number of forms, including a letter of credit (LOC), mortgage backed security (MBS), collateral pledge, bond insurance, etc.  The form of credit enhancement must be sufficient for a minimum rating in the “A” category by Standard and Poor’s (or the equivalent). The bond rating must be obtained by the closing of the bond issue.

Multifamily Bond Financing
Types Of Bonds
Costs Of Issuance